Monday, April 18, 2011

Oops, another correction to "Why all this deficit stuff matters"

In that post, I said, "And "tomorrow" no longer means some far-flung future; city and state munis are being de-rated by bond companies right now, and we're hearing the first hints that it could start to happen to federal bonds, too. Within just a few years, we could be paying junk bond interest rates for T-bills, which would make everything I've outlined above far, far worse." Well, I was wrong- it's not "Within just a few years", it's right now Standard and Poor issued the threat today: "NEW YORK (Reuters) – Standard & Poor's threatened Monday to downgrade the United States' prized AAA credit rating unless the Obama administration and Congress find a way to slash the yawning federal budget deficit within two years." I hate to say I told you so, but...

No, actually, I don't hate it at all.

1 comment:

Eruonen said...

Interesting look at what it would take by tax increases alone to cover spending:

Taxes to Balance the Budget? Not Unless Rates Go Up 150 Percent, Study Says

Published April 18, 2011

At least now, though rather late, the conversation includes actual cuts in spending (I hope).